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You need to negotiate a resolution to your IRS tax debt. If the IRS has filed a lien against you and/or is levying your bank account or wages, it means that they have begun enforced collection against you. To prevent this from getting any worse, you will need to negotiate a resolution to your tax debt. This will stop IRS collections (e.g. levy against income, bank). It will not remove the lien, which will likely remain in place until tax debt has been paid in full or expires.
To quickly resolve your particular situation, first, ensure that you have filed all necessary tax returns. The IRS will not negotiate a resolution to a tax debt unless all current returns due have been filed. Then, adjust your withholdings or start making estimated tax payments on the current year. Again, the IRS will not negotiate a resolution to a tax debt unless the taxpayer takes steps to ensure that he/she will not owe in future years.
After those two preliminary steps, find out how much you owe and from what years. If you owe for recent tax years and owe less than $25,000, you can set-up a monthly payment plan directly with the IRS. Called a Streamlined Installment Agreement (SIA), it is merely a payment plan that will pay-off the tax debt in 60 months or less. Take the amount you owe, divide it by 60 months, and then multiply that amount by 1.2. This multiplier accounts for interest and penalties that will continue to accumulate.
If you owe for older years, owe more than $25,000, or cannot afford a monthly payment to the IRS, complete an IRS Form 433-F, Collection Information Statement. This is the document the IRS provides taxpayers to resolve their back taxes either through an Installment Agreement (IA) or by placing them into a protected status against collections (a/k/a Currently Not Collectible (CNC) status). You will need to submit it along with relevant proof documents (e.g. paycheck stubs, bank statements) to the IRS. This can be done over the telephone (800-829-1040) or via mail (see IRS.gov for addresses). Once placed onto an IA or CNC, the IRS will stop IRS Collections.
After stopping IRS collections, you may want to consider an Offer in Compromise (OIC). An OIC is a settlement with the IRS. Basically, you come to terms with the IRS on what you can afford to pay in a single, lump sum payment or a payment over two years that will completely extinguish your IRS tax debt. Whether this amount is less than what you currently owe is dependent upon your current financial situation. If you do not have a lot of assets and are "in the red" month after month, an Offer in Compromise might be for you. For more information, check out the attached IRS publication.
Finally, you do not have to face the IRS on your own. There are tax professionals who specialize in resolving IRS tax debt. You may want to contact those individuals and seek assistance. They should be able to identify what type of IRS tax debt resolution is most appropriate for you given your current financial situation during their free consultation.
To quickly resolve your particular situation, first, ensure that you have filed all necessary tax returns. The IRS will not negotiate a resolution to a tax debt unless all current returns due have been filed. Then, adjust your withholdings or start making estimated tax payments on the current year. Again, the IRS will not negotiate a resolution to a tax debt unless the taxpayer takes steps to ensure that he/she will not owe in future years.
After those two preliminary steps, find out how much you owe and from what years. If you owe for recent tax years and owe less than $25,000, you can set-up a monthly payment plan directly with the IRS. Called a Streamlined Installment Agreement (SIA), it is merely a payment plan that will pay-off the tax debt in 60 months or less. Take the amount you owe, divide it by 60 months, and then multiply that amount by 1.2. This multiplier accounts for interest and penalties that will continue to accumulate.
If you owe for older years, owe more than $25,000, or cannot afford a monthly payment to the IRS, complete an IRS Form 433-F, Collection Information Statement. This is the document the IRS provides taxpayers to resolve their back taxes either through an Installment Agreement (IA) or by placing them into a protected status against collections (a/k/a Currently Not Collectible (CNC) status). You will need to submit it along with relevant proof documents (e.g. paycheck stubs, bank statements) to the IRS. This can be done over the telephone (800-829-1040) or via mail (see IRS.gov for addresses). Once placed onto an IA or CNC, the IRS will stop IRS Collections.
After stopping IRS collections, you may want to consider an Offer in Compromise (OIC). An OIC is a settlement with the IRS. Basically, you come to terms with the IRS on what you can afford to pay in a single, lump sum payment or a payment over two years that will completely extinguish your IRS tax debt. Whether this amount is less than what you currently owe is dependent upon your current financial situation. If you do not have a lot of assets and are "in the red" month after month, an Offer in Compromise might be for you. For more information, check out the attached IRS publication.
Finally, you do not have to face the IRS on your own. There are tax professionals who specialize in resolving IRS tax debt. You may want to contact those individuals and seek assistance. They should be able to identify what type of IRS tax debt resolution is most appropriate for you given your current financial situation during their free consultation.
